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HECS hell for young Aussie as student debt stops her buying a home: ‘I’m getting screwed’

She now has to use a huge chunk of her savings to pay off her university debt instead of buying a home

An Australian musician has held back tears while explaining the frustrating reason she can’t get a mortgage, and it’s not high interest rates or that she couldn’t save enough.

There are loads of reasons why a bank might knock you back for a home loan, especially in a cost-of-living crisis, however, Euca didn’t think it was going to be her university debt.

The wedding singer posted a video recalling her heartache when she was informed she would have to use a huge chunk of her deposit to pay off her HECS before she could become a homeowner.

hecs debt
The HECS bill has caused Euca to miss out on buying a home in Coffs Harbour. (Source: TikTok)

“I was told it doesn't even matter how much HECS debt I have - it could be $100k, it could be $5k - and my issue is exactly the same,” Euca revealed on TikTok.


“So, I now have to use my house deposit savings - that I've been saving for years - to pay off my HECS debt and pretty much have to start again.”

Is HECS debt holding you back? Contact

Euca had plans to buy a home in Coffs Harbour, on the NSW Mid North Coast, but now feels like she’s back to square one. Euca told the bank she had enough finances for the loan and the repayments, but her HECS was a huge barrier.

“That just kills me,” she said.

The situation was made worse in November last year, when her hours at her part-time job were reduced to just one day a week.


The musician said she also didn’t know that claiming items relating to her profession on tax was reducing her taxable income, making her appear more of a financial risk in the bank’s eyes.

“Even though I earned the money and spent it and claimed it appropriately, I'm getting screwed because now my income looks like less because of the way they categorise claims on tax returns for sole traders,” Euca explained to her followers.

She was told she would now have to transfer funds between her bank accounts on a fortnightly basis to show she was earning a proper wage.

HECS debt has been a talking point this week after the release of the highly-anticipated Universities Accord final report, which recommended “fairer and simpler” indexation for HELP loans to make tertiary education more affordable.

Last year, former students said they felt hopeless about the prospect of paying back the growing debt after one of the highest indexation hikes in decades.

The increase added an extra $1,759 to the average Aussie’s debt.

Even last week, a young worker expressed her frustration about the entry-level pay for a marketing role she studied for, which she said wouldn't even put her in the realms of paying off her HECS debt.

‘Tricky’: How can I get a home loan with HECS debt?

Mortgage Choice broker David Thurmond told Yahoo Finance that, while Euca’s situation was very specific, banks were always on the lookout for things that might make you look like a risk.

“It will all depend on your income because HECS is income-based,” Thurmond said. “So, your repayment is calculated on the taxable income that you have, and the higher your income, the higher their required repayment.

“And the tricky part with HECS is, even if you've got a $2,000 balance, which is quite small, if you earn $150,000 a year, for example, your repayments would still be $900 per month and so that's impacting your borrowing capacity.”

Thurmond encouraged people to speak to a mortgage broker to make sure these types of issues could be addressed early.

Not everyone will have to pay off their HECS debt in full before getting a loan, but there might be some individual circumstances you’re not aware of that could affect your borrowing limit.

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